OVERVIEWI have the honour to present my report for the NICOZDIAMOND Group of Companies together with the audited accounts for the year ended 31 December 2009.

I wish to begin by thanking the shareholders for the tremendous support that was rendered through the uptake of the rights offer shares issued in December 2009. The company managed to raise the much needed capital of US$4 million. Equipped with this additional capital, the Directorate, management and staff of NicozDiamond are doing the very best needed to ensure good returns are realised for the shareholders from 2010 and beyond.

OPERATING ENVIRONMENTAs the economy showed good signs of recovery in 2009, the company recorded commendable improvements in business. Progressive increase in business was witnessed throughout the year. Most clients appreciated the need to have adequate insurance covers in place since the introduction of multi-currency but full take up of insurances was generally hampered by the liquidity challenges that characterized the economy. Despite the liquidity challenges, most clients at least insured their key strategic assets and tended to opt for short period policies as opposed to annual covers.

Competition continued to be strong within the short term insurance sector and premium rates remained depressed particularly for the Motor and Accident classes. There is increased hope that the situation will improve as the economy recovers since the insurance industry, l ike any other industry, depends on the performance of the economy in general. The aggressive marketing programme embarked on during the year produced good results as business retention and new business were at good levels.

FINANCIAL PERFORMANCE OVERVIEWThe Gross Premium Written for the year was US$12.1 million. The retention ratio was conservatively low at 59% as the company was still adjusting to the hard currency denominated risk. These are expected to improve in the medium term as the additional capital raised in December 2009 assisted in enhancing the underwriting capacity of the group. Caution on retention levels will however continue to be exercised until the economy stabilises. A sharp increase in claims was witnessed particularly in the last quarter of the year though the claims ratio of 32.2% as at year end is considered good in relation to international benchmarks.An underwriting profit of $786,119 was made for the year translating to a good underwriting profit margin of 11%. Prudent underwriting, effective claims management and aggressive cost control measures contributed to the good margins and these remain key in maintaining underwriting profits in the future. The expense ratio at 46% is likely to be improved on as the retention levels are increased in the future.

Underpinning the group’s performance was Investment Income of $1.5 million. This mainly arose from the gains recorded on equities quoted on the stock exchange and the returns from the investment properties.

A Profit of $1.8 million was made for the year 2009.

REGIONAL OPERATIONSNICOZDIAMOND maintained all its management and technical services agreements in Malawi, Zambia, Angola and Uganda.

The subsidiary in Uganda, First Insurance Company of Uganda also recorded underwriting profits and business growth was witnessed over the year. Additional capital was injected into the company at the end of 2009 to enhance underwriting capacity.

SOCIAL RESPONSIBILITYThe company continues to play an active role in extending a helping hand to the less privileged in the society. During the year the company partnered with Africa University to raise school fees for distressed students. Support was also continued to Shirley

CHAIRPERSON’S STATEMENT

PERFORMANCE HIGHLIGHTS (Key Ratios)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

ExpenseR atio

C ombinedR atio

C ompany Group

58.9%

U/W ProfitMargin

RetentionRatio

ClaimsRatio

CommissionRatio

32.2%

8.4%

46.1%

86.7%

11%

Cripps in Murehwa and Thembiso Children’s home in Bulawayo. The Company also responded to the plight of primary school pupils in Chikomba district by donating schooling utensils and books.

RATINGThe company once again subjected itself to a claims paying ability assessment by Global Credit Rating Company of South Africa (GCR). An A- rating was maintained from the previous assessments. Despite the instability that prevailed in the economy, NicozDiamond was found to still have a strong claims paying ability.

DIVIDENDThe Board has seen it fit not to declare a dividend for the year ended 31 December 2009. The company raised additional capital in December 2009 and returns from the enhanced underwrit ing capacity were yet to be realized.

DIRECTORATEIn terms of article 77 of the Company’s Articles of Association, Messrs James Karidza and Gladman Sabarauta retire by rotation and all being eligible, they offer themselves for re-election at the next Annual General Meeting of the Company.

FUTURE PROSPECTSThe formation of the Government of National Unity (GNU) and introduction of the multi-currency system brought renewed optimism in the Zimbabwean economy. The developments particularly attended to the key economic fundamental of inflation that previously affected the insurance business the most, making the future outlook of insurance promising. Based on the achievements of the GNU to date, it is envisaged that full recovery of the economy will happen in the medium term.The company is ready to fully exploit the opportunities arising from the recovery as it has gone ahead to enhance its underwriting capacity through the additional capital raised.

ACKNOWLEDGEMENTSAll the achievements of the year gone past would not have been possible without the coordinated efforts of the Directors, management and staff. I would therefore want to extend my sincere gratitude to my fellow Directors for their invaluable contributions during the year.

On behalf of the Board, I also extend my appreciation to management and staff for their continued dedication to duty and commitment to good performance.

The support received from our clients, brokers, reinsurers, business partners, regulatory authorities and above all the Commissioner of Insurance's Office is greatly appreciated.

We look forward to continued support and co-operation in the year ahead.

Mavis Chidzonga DrCHAIRPERSON16 March 2010

Dr Mavis Chidzonga (Chairperson), Mrs Grace Muradzikwa* (Managing Director), Mr Harold Andrew Richard Bijoux, Mr James Karidza, Mrs Thembiwe Chikosi Mazingi, Mr Munyaradzi Murape, Mr Albert Joel Nduna, Mr Gladman Sabarauta* Executive Director

1. CORPORATE INFORMATIONThe consolidated financial statements of NICOZ DIAMOND Insurance Limited for the year ended 31 December 2009 were authorised for issue in accordance with a resolution passed by the directors on 16 March 2010. The principal activity of the group is short term insurance. The shares of the holding company are publicly traded.

2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATIONThe financial statements are expressed in United States Dollars which was the functional and reporting currency in the period under review. Accounting policies have been applied consistently in all material respects with those applied by the Group in the past, except for :IAS 1 (Presentation of Financial Statements)IAS 21(The effects of changes in Foreign Exchange Rates)IAS 29 (Financial Reporting in Hyperiflationary Economies)

IAS 1 requires an entity to disclose comparative information in respect of the previous reporting periods. In order to report in the new functional currency IAS 21 and IAS 29 require that, inflation adjusted financials be prepared and converted to the new currency using the closing exchange rates at the day of change in functional currency. Due to the unavailability of inflation indices past July 2008, and multiplicity of exchange rates in determining fair value, comparative figures have not been presented.

The Group used the guidance issued by the Public Accountants and Auditors Board (PAAB), the Zimbabwe Accounting Practices Board (ZAPB), and the Zimbabwe Stock Exchange (ZSE) to translate the Financial Statements at 31 December 2008 to United States Dollars.

3. AUDIT OPINIONIn line with guidance from the PAAB, the ZAPB and the ZSE , these financial statements shall carry an adverse opinion on all comparative information, the statement of comprehensive income, the statement of cash flows and statement of changes in equity, due to the inability to comply with IAS 29 - Financial Reporting in Hyperinflationary Economies, IAS 21 - The Effects of Changes in Foreign Exchange Rates and IAS 1 - Presentation of Financial Statements.

4. INVESTMENTSShort term investments are made up of:Quoted equities 2,601,622 Money Market investments 2,591,025

Total 5,192,647

SUPPLEMENTARY INFORMATION

AUDITED F INANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009

Motor Insurance Manufacturing Insurance Farming Insurance Mining Insurance Household Insurance

Group Company2009 2009

$ $ASSETS

Non-current assets 6,559,630 3,774,724Property, plant and equipment 1,169,840 1,030,285Investment properties 4,701,700 1,341,700Investment in subsidiary - 1,018,930Deferred tax asset 146,998 -Investment in associates 139,861 63,010Investment in unquoted equities 320,799 320,799statutory deposit 80,432 -

Current assets 11,143,771 8,864,680Trade receivables 2,715,344 2,072,863Inventory 17,569 17,109Deferred acquisition costs 305,420 305,420Available for sale investment 361,449 -Related party receivables 59,385 -Other receivables and prepayments 613,047 443,608Short-term investments 5,192,647 4,701,622Cash and cash equivalents 1,878,910 1,324,058

Total assets 17,703,401 12,639,404

EQUITY AND LIABILITIES

Equity attributable to owners of the parent 10,391,695 7,929,620Share capital 2,797,251 2,797,251Share Premium 3,224,234 3,224,234Retained earnings 1,798,756 1,908,135Capital Reserve 25,461 -Other reserves 2,545,993 -

Non-controlling interest 301,506 -

Total equity 10,693,201 7,929,620

Non-current liabilities 1,823,331 958,131Deferred Tax 1,823,331 958,131

Current liabilities 5,186,869 3,751,653Trade payables 807,900 484,363Related party payables 214,266 215,660Other payables and accruals 1,296,311 1,093,988Current tax payable (77,371) (176,954)Short-term provisions 2,945,763 2,134,596

TOTAL EQUITY AND LIABILITIES 17,703,401 12,639,404

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 31 December 2009

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 31 December 2009

2009US$

Gross Premium Written 12,114,404Premium Ceded (4,980,145)Net Premium Written 7,134,259Unearned premium provision (1,242,177)Earned Premium 5,892,082Brokerage commission and fees 1,314,271Investment revenue 343,593Other revenue 50,837Total Revenue 7,600,783

Total expenses (6,420,234)Net benefits and claims (1,894,347)Commission and acquisition expenses (1,809,172)Operating and administrative expenses (2,716,715)

Operating profit 1,180,549

Other income 1,386,469Profit before share of profit of associate 2,567,018

Share of associate profit 76,851Profit before taxation 2,643,869Income tax expense (472,865)Profit after taxation 2,171,004

Other comprehensive income:Loss on available for sale financial assets (124,143)Rights Issue costs (236,534)

Total Profit for the period 1,810,327

Attributable profit shared as follows:Attributable to the parent 1,903,017Non-controlling interests (92,690)

1,810,327

Basic earnings per share (US cents) 0.53Diluted earnings per share (US cents) 0.51

US$

Net cash generated from operating activities 812,334 Net cash outflow to investing activities (2,799,343)Net cash inflow from financing activities 3,759,535 Net increase in cash and cash equivalents 1,772,526 Cash and cash equivalents at beginning of year 106,384 Cash and cash equivalents as at 31 December 2009 1,878,910

ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 31 December 2009

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYAs at 31 December 2009

I/We............................................................................................................................................being a member(s) of the above Company

and entitled to vote, hereby appoint of ................................................................................................................................or failing him/her,

.....................................................................................................................................................................................................................or failing him/her, the Chairperson of the Annual General Meeting, as my/our proxy to vote for me/us and on my/our behalf at the Annual General meeting of NicozDiamond Shareholders to be held in the NicozDiamond Auditorium, 7th Floor, Insurance Centre, 30 Samora Machel Avenue, Harare, at 1200 hours on Tuesday, 18 May 2010, and at any adjournment thereof.Signed this .......................................................day of..............................................................................2010

SIGNATURE OF MEMBER ...................................................................

Company Seal or Stamp

Notes:1. In terms of Section 129 of the Companies Act [Chapter 24:03] a member entitled to vote at the Annual General Meeting is entitled

to appoint one or more proxies to attend and vote and speak in his stead. A proxy need not be a member of the Company.

2. In terms of Article 89 of the Company’s Articles of Association, to be valid, proxy forms should be completed and deposited at the registered office of the Company in Harare, not less than twenty four (24) hours before the time for holding the meeting.

3. Any alteration to this proxy form must be signed by the person signing the proxy form.

4. Duly completed proxy forms must be lodged with, or posted to the company’s registered office, NicozDiamond Insurance Limited, 2nd Floor Insurance Centre, 30 Samora Machel Avenue, P O Box 1256, Harare so as to be received by them not later than 1200 hours on Monday, 17 May 2010.

5. The completion and lodging of this form will not preclude the relevant Shareholder from attending the AGM and voting thereat, in person to the exclusion of any proxy appointed in terms hereof, should such Shareholder wish to do so.

6. The authority of a person signing the Form of Proxy under a power of attorney or on behalf of a company must be attached to the Form of Proxy unless the power of attorney has already been registered by NicozDiamond or in the case of a company; this Form of Proxy is sealed.

Non-Share Share Retained Capital Other controlling Total

capital premium earnings Reservee reserves Total interests equityUS$ US$ US$ US$ US$ US$ US$ US$

Balance at 1 January 2009 - - (438,957) 25,461 4,781,961 4,368,465 394,196 4,762,661

Issue of share capital 799,214 3,196,856 - - - 3,996,070 - 3,996,070

Transfer - rights issue costs - (236,534) 236,534 - - - - -

Total comprehensive income for the year - - 1,903,017 - - 1,903,017 (92,690) 1,810,326 Profit for the year - - 2,220,592 - - 2,220,592 (49,588) 2,171,003Other comprehensive income net of taxes: - - (317,575) - - (317,575) (43,102) (360,677)

Transfer from other reserves 1,998,037 263,912 98,162 - (2,235,968) 124,143 - 124,143

Balance at 31 December 2009 2,797,251 3,224,234 1,798,756 25,461 2,545,993 10,391,695 301,506 10,693,201

Notice is hereby given that the 8th Annual General Meeting of the shareholders of NICOZDIAMOND Insurance Limited will be held at the NICOZ DIAMOND Auditorium, 7th floor Insurance Centre, 30 Samora Machel Avenue, on 18 May 2010 at 1200 hours for purpose of transacting the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the financial statements and reports of the Directors and Auditors of the company for the financial year ended 31 December 2009.

2. To re-elect Messrs James Karidza and Gladman Sabarauta as Directors of the company. In terms of Article 77 of the companies’ Articles of Association, they retire by rotation and all being eligible, they offer themselves for re- election.

3. To approve the remuneration of the auditors for the past audit and re-appoint Ernst & Young Chartered Accountants Zimbabwe as auditors of the company until the conclusion of the next Annual General Meeting.

4. To approve the remuneration of the Directors for the past financial year.

5. To approve that a further 55 945 016 of the unissued shares of the Company be placed under the control of Directors who shall have the authority to issue the shares for the purpose of an Employee Share Option Scheme.

6. To transact all such business as may be transacted at an Annual General Meeting.

ProxiesIn terms of the Companies Act (Chapter 24:03) a member entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote on a poll and speak in his stead. A proxy need not be a member of the Company. Proxy forms must be lodged with the secretaries not less than forty-eight hours before the time for holding the meeting.

By Order of the Board

NICOZDIAMOND Insurance Limited

G. ZvaravanhuCompany Secretary

27 April 2010

NOTICE TO SHAREHOLDERS

PROXY FORM